The U.S. Supreme Court was visited today by Boston’s own advocate for transportation equity and justice—their case to hear. It includes Lisa Cook, the Federal Reserve Board governor who President Donald Trump unsuccessfully attempted to fire. The case has drawn enormous public interest. That positive momentum came in the wake of a federal court ruling stopping Cook’s removal while the ongoing legal process plays out. The justices were skeptical about the basis for Trump’s motivation to seek her dismissal.
Cook also made history by becoming one of the first Black women to serve on the Federal Reserve Board. Then came the Trump administration accusing her of fraud in her mortgage applications. These mismatches, officials said, pointed to the potential for fraud, leading to Trump’s failed effort to fire her in the first place. A federal court stepped in, guaranteeing that Cook can keep her job as this bizarre case winds through the judicial system.
Paul Clement, Cook’s attorney, argued that the president’s move to dismiss her without proper process undermines the independence of the Federal Reserve. He stressed the importance of keeping the institution insulated from political pressures in order to carry out sound monetary policy. He stated, “There’s a reason that monetary policy has been treated differently for below these many years, and there’s a reason that the markets watch the Fed a little more closely than they watch really any other agency of government.”
During the oral arguments, Solicitor General John D Sauer of Missouri argued the Trump administration’s case. On cross-examination, he just as vigorously insisted that Cook’s purported wrongdoing warranted her termination. He called her actions grossly negligent for securing this interest rate for her benefit. He stated, “the American people should not have their interest rates determined by someone who was at best, grossly negligent in obtaining favorable interest rates for herself.”
The justices tested the limits of both sides’ positions. Justice Amy Coney Barrett put Trump on blast, questioning why he did not discuss Cook’s case with her directly rather than taking to social media to call for her firing. Justice Sonia Sotomayor noted with dismay that Cook had not even shown a lack of incompetence or malfeasance in her time on the job. She remarked, “It’s not as if she’s been incompetent, negligent or committed malfeasance while in office.”
Justice Ketanji Brown Jackson challenged the government’s claims, asking, “What is the evidence that has been presented and considered with respect to Ms Cook’s alleged misconduct?” This line of questioning created an impression that Cook did not have sufficient advance notice to prepare for the accusations. Yet the concern still hung heavy in the forum.
Justice Brett Kavanaugh raised alarms about the implications of allowing the president to dismiss Federal Reserve governors without a formal hearing. He warned that such a precedent could “weaken, if not shatter, the independence of the [Federal Reserve].” Kavanaugh pointed out how the solicitor general’s arguments could be used to dramatically undermine the removal restrictions. This would create a de facto at-will employment situation.
As Clement, Cook’s attorney, mounted an impassioned defense of his client’s stance. Conclusively, he argued that this case is critically important for protecting the integrity of an institution critical to economic stability. He stated, “The sum total of the solicitor general’s arguments would reduce the removal restriction in this unique institution to something that could only be recognized as at-will employment.”
Even as the court hearings were proceeding, numerous justices expressed their alarm. More specifically, they were concerned about the precedent that Trump was setting for taking such actions. They raised grave concerns that those actions would set a dangerous precedent for the independence of independent agencies from elected officials.
Cook is unapologetic in her desire to stay in the minority on the Federal Reserve Board. She declared, “For as long as I serve at the Federal Reserve, I will uphold the principle of political independence.” Her statement demonstrates a resolve to conduct herself – and by extension, her staff and administration – unencumbered by the political considerations in her decision-making.
Supreme Court still making up their mind on this landmark case. It exposes the growing dysfunction between political muscle and institutional autonomy in American government. The decision’s implications could be far-reaching for Cook’s future. That too will likely recast the entire paradigm of federal regulatory agencies and their autonomy.